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You answered the question at the heart of the details, actually.
"You should be able to ask your agent all the questions you can come up with, and to the degree there ARE answers to them, your agent should give his/her best answer."
And yes to the "art" I totally agree - that's why me doing the comparisons can never be the same as what an experienced Realtor can assess. For me best for the process would be start with the spreadsheet so I can get my eyes on fact, and then tell me why those #s don't reflect the true value of the house (if they in fact don't).
Yes, I can see easily getting stuck on details. It's a big purchase, with lots of unknowns. Hopefully we won't do that, and if we are, the Realtor can help us see why it does not matter as much as we think. I'm thinking / assuming you don't mean comps is one of those unnecessary details. Although I can also see how if you like the house, and can afford it, some may just feel comfortable going for it without any comps.
Not all clients want to see comps. If we've been out looking awhile, often times, they've seen enough houses in their price range to have an opinion about how the house stacks up against those, and whether the price is probably right, or they want to offer less. We offer our opinion too, but assuming we aren't out showing them homes that are priced way out of the ball park, most are not likely to go for too far off the list price, at least in our market.
You're not starting from scratch usually, coming up with a price. There are usually clues that help tell us if the price is likely to be pretty firm or if there's probably room for negotiation.
Thank you so much for this rrah, and on a Saturday night! Really appreciate it.
It's to buy a particular house - in a particular neighborhood.
We have several HOA type communities around and have narrowed down to 3 potential communities based on how they look.
The stage I'm at is seriously thinking about making an offer.
But what exactly is a "market overview in a certain price range"? Are you saying bring up homes in that price range for that community or other communities nearby and then compare what I could get for that price in other places? Is that the goal of this overview.
And when you say recent comps is that something he would pull together and then explain to me? Or will he just send me listings of homes and then I have to kind of figure it out myself? I guess I'm trying to figure out how much I can expect him to do versus what I should be doing myself.
I will pull comps at the office with the buyer, putting in that neighborhood with homes within 300 sf in size. Depending on the number of sold listings, i may narrow it to same number of stories/garage vs no garage/lot size etc. I like the buyer to be there so i can show them the criteria used, photos of the sold comps, location (ie...is the home they are looking at on a busier street/better views, etc), so they can get a good idea of the comps. Then i go over the price per sf for them, and they can see from photos and description how it compares to the home they are considering. Then, based on all of the info we come up with a price to offer.
In a hot real estate market, you need to find the balance between making a quick offer and gathering facts. There is a balance. In your state do you have an option period? I'm asking because that gives you time to get inspections, gather information, etc. and if you uncover something that makes you uncomfortable or whatever you can easily get out from under the contract and only lose your option fee.
Not all clients want to see comps. If we've been out looking awhile, often times, they've seen enough houses in their price range to have an opinion about how the house stacks up against those, and whether the price is probably right, or they want to offer less. We offer our opinion too, but assuming we aren't out showing them homes that are priced way out of the ball park, most are not likely to go for too far off the list price, at least in our market.
You're not starting from scratch usually, coming up with a price. There are usually clues that help tell us if the price is likely to be pretty firm or if there's probably room for negotiation.
Right, we're only talking about clients who want them...
And true, if you've been in your price range you start to get a general feeling...but sometimes you may not have any homes to look at in a particular HOA for a little while. So unless you're regularly seeing homes in all the neighborhoods you're interested and keeping track of some sort, it's hard to do those comparisons in your head, at least for me. Nothing brings clarity for me like #s, even if I do have some idea.
So I just have to be OK with asking for comps and asking for him to go over them with me. Unless the house is just so perfect for us and the price immediately sticks out as right, or we don't even care too much about the price being right on because the house is above all others - which I agree with you can happen too.
I will pull comps at the office with the buyer, putting in that neighborhood with homes within 300 sf in size. Depending on the number of sold listings, i may narrow it to same number of stories/garage vs no garage/lot size etc. I like the buyer to be there so i can show them the criteria used, photos of the sold comps, location (ie...is the home they are looking at on a busier street/better views, etc), so they can get a good idea of the comps. Then i go over the price per sf for them, and they can see from photos and description how it compares to the home they are considering. Then, based on all of the info we come up with a price to offer.
Thanks Spottednikes. Sounds like a good process.
How do you handle it when *you know* the price is right and it's imperative to make an offer quickly, but the client doesn't seem ready to move forward with the offer?
In a hot real estate market, you need to find the balance between making a quick offer and gathering facts. There is a balance. In your state do you have an option period? I'm asking because that gives you time to get inspections, gather information, etc. and if you uncover something that makes you uncomfortable or whatever you can easily get out from under the contract and only lose your option fee.
I agree with you 100% about finding the right balance. And if the realtor said - "guys, the house is priced right - if you really like it, we should make an offer - we don't have time to run comps" - then if I trust the Realtor to be looking out for my interests I would listen. But if he/she says nothing how do I know better? Of course I can get a sense myself too, but I will never have a pulse on the market the way my Realtor could.
I'm going to find out if there is an option period - I do not know.
So, if you haven't hired the agent, I would ask for an agency disclosure for whatever state and an agency agreement if your state uses them.
If you've already dealt with agency issues, I would want to see any disclosures relating to the property (in my state it would a property disclosure, hoa disclosure, and lead based paint if built prior to 78 but every state is different).
I would want listing history to see if it's been on and off the market.
Tax records.
Any invoices for work completed on the home.
Pricing analyses/CMA to I can see what other similar homes sold for. CMA may not be necessary if you've already viewed the similar homes and feel pretty good about the price compared to the other homes out there or if your agent knows the market well enough that he's comfortable advising on price. Still never a bad idea just to check and see though.
Edit: saw your question about comps. I've seen some terrible CMA's over the years. There aren't hard and fast rules, but it should be a similar style/size/location/finish.
Ex - If I am doing a CMA for a 2 story home that is 2500 sf, vinyl, and built in 2010 I want to pull comps that are 2 story homes between (can't compare 1 story to 2 story, prices are different) 2000-3000 sf (can make adjustments for smaller or larger, but have to set mins/maxes to try to keep it close) in the same neighborhood if possible (or same elementary school or middle or high school) with vinyl or partial vinyl siding. Lastly, I'll look at photos for interior finish: granite vs. formica, hardwoods or laminite vs carpet, nice light fixtures and hardware vs. cheap or dated (brass) fixtures and hardware, etc.
Last edited by Brandon Hoffman; 10-21-2019 at 11:10 AM..
How do you handle it when *you know* the price is right and it's imperative to make an offer quickly, but the client doesn't seem ready to move forward with the offer?
We work for the client. If the client isn't ready, they're not ready. It makes no difference what we think. Sometimes clients become ready by missing out on a couple of homes.
This is where you need to be in charge of your own level of interest. YOU decide how excited to be. YOU decide you want the house, not the agent.
I am pretty patient to keep working with clients awhile until they 'get' ready... and if there are legitimate reasons to turn down houses, I'll keep showing them homes until we find the right one, but sometimes there comes a point where agents decide you're not ready enough to keep spending a lot of time and energy and gas with.
You need to be honest with yourself and gauge whether you are hesitating based on real cause or hesitating because no one can answer every unknown about a house.
If you want absolute certainty that the price you offer is the exact right price and not a dollar more... there is no such price. Real estate is unique. Even in condominium buildings with the same floor plan, each property has differences that will affect price, and every buyer and seller may arrive at a different deal. No matter how much advice your realtor can give you about comps, it will ultimately be up to YOU what it's worth.
So, if you haven't hired the agent, I would ask for an agency disclosure for whatever state and an agency agreement if your state uses them.
If you've already dealt with agency issues, I would want to see any disclosures relating to the property (in my state it would a property disclosure, hoa disclosure, and lead based paint if built prior to 78 but every state is different).
I would want listing history to see if it's been on and off the market.
Tax records.
Any invoices for work completed on the home.
Pricing analyses/CMA to I can see what other similar homes sold for. CMA may not be necessary if you've already viewed the similar homes and feel pretty good about the price compared to the other homes out there or if your agent knows the market well enough that he's comfortable advising on price. Still never a bad idea just to check and see though.
Thanks Brandon. Sounds like a good list - assuming there is time to gather all that stuff. Always good to know what's ideal and scale back based on the circumstances if necessary.
We work for the client. If the client isn't ready, they're not ready. It makes no difference what we think. Sometimes clients become ready by missing out on a couple of homes.
This is where you need to be in charge of your own level of interest. YOU decide how excited to be. YOU decide you want the house, not the agent.
I am pretty patient to keep working with clients awhile until they 'get' ready... and if there are legitimate reasons to turn down houses, I'll keep showing them homes until we find the right one, but sometimes there comes a point where agents decide you're not ready enough to keep spending a lot of time and energy and gas with.
You need to be honest with yourself and gauge whether you are hesitating based on real cause or hesitating because no one can answer every unknown about a house.
If you want absolute certainty that the price you offer is the exact right price and not a dollar more... there is no such price. Real estate is unique. Even in condominium buildings with the same floor plan, each property has differences that will affect price, and every buyer and seller may arrive at a different deal. No matter how much advice your realtor can give you about comps, it will ultimately be up to YOU what it's worth.
You have to decide to do it, or not.
If I am hesitating, it would come only if the house is not ticking off all the boxes - there is one neighborhood where if something became available we would decide very quickly. The rest of the neighborhoods are more on a case by case basis.
I just have to get comfortable asking for comps and get OK with wanting him to explain them to me for those "case by case" homes. (which don't come up often because in a few "tours" of looking at different homes we narrowed down and got clear on what is a dealbreaker and what's not.)
I think what has made this a little murky for us is that we thought buyer's agent was different than just a "regular" realtor. We thought there would be more guidance. I'm starting to see that there isn't. Like you say, we have to take more charge, which sometimes also means asking for what we need.
But of course nobody makes - or can or should make - any decisions for us. Case in point - we are looking at houses smaller than he generally advises, and we're OK with that, even though we understand the reasoning behind the recommendation.
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